Riversdale Mozambique has signed a contract with McC Contracts for its first open pit mine, the Benga coal mine, in Mozambique.

The contract with MCC includes open pit mining and associated services with production planned for 5.3 million tons a year.

The targeted annual output is 1.7 million tons of hard coking coal and 0.3 million tons of export thermal coal.

The company plans to spend $270m on the stage-one development while the entire project will cost more than $1bn.

The Benga project is Riversdale’s first venture in Mozambique, with the resource estimated to produce a run of 20 million tons a year for more than 25 years.

Riversdale holds a 65% stake in the mine and India’s Tata Steel owns the rest.